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Bellwood Corp. is comparing two different capital structures.Plan I would result in 26,000 shares of stock and $85,500 in debt.Plan II would result in 20,000 shares of stock and $256,500 indebt. The interest rate on the debt is 6 percent. Assume that EBITwill be $95,000. An all-equity plan would result in 29,000 sharesof stock outstanding. Ignore taxes. What is the price per share ofequity under Plan I? Plan II?
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